“You Ride The Wave Until It Dies” In California
The Fresno Bee reports from California. “In the first half of this decade, Silicon Valley residents sought refuge by the thousands in the central San Joaquin Valley. The wave of high-income refugees from the Bay Area and Southern California helped fuel the San Joaquin Valley’s real estate boom, in which home prices more than doubled in a five-year period.”
“Last year, however, the flow screeched to a halt, local market watchers say. ‘There’s probably not as much panic about moving out of the Bay Area now because housing prices there are stabilizing,’ said London Properties CEO Dan Conner. ‘The panic of getting out of there and getting something affordable is not there anymore.’”
“Clovis Community and Economic Development director Michael Dozier conducted surveys of new residents in 2003 and 2006 and found big changes that bear out Conner’s point.”
“In 2003, three out of 10 newcomers to Clovis who responded to Dozier’s survey said they had moved there from the Bay Area. In 2006, only one out of 10 said they came from the Bay Area.”
“Rama Ambati, a relocation specialist, said that she used to get at least 25% of her customers from the Bay Area. Now, she says, ‘it has dwindled off.’”
“Guarantee Real Estate owner Joan Eaton said that a second factor in recent years was the number of outsiders buying homes here as an investment, sometimes with no intention of ever moving here. Those numbers aren’t reflected in the IRS data, which track where people file their tax returns. But it still added fuel to the boom.”
“‘During those years, we had increasing numbers of home buyers from outside the area,’ Eaton said.”
The Sierra Sun. “Despite rent increases across most of the West, landlords in North Tahoe and Truckee say residential rent has remained stable to keep housing occupied.”
“‘It is hard to fill up properties when [landlords] are aggressive on the price,’ said Tyler O’Neal, property manager on the North Shore. ‘People couldn’t afford to live and work here. A lot of owners try to accommodate the renters. They might come down on the rent to get the right person in there.’”
“Area property managers interviewed said that they encourage landlords, who are mostly second homeowners, to be reasonable with prices because it is expensive to live in Tahoe and Truckee.”
“‘If you price yourself out of the market, you won’t have anyone,’ said Ken Degney, owner of Assist 2 Sell in Kings Beach and Incline Village.”
“Debbie Milani, property manager in Tahoe City, said there used to be a ‘waiting list of renters’ seeking a long-term rental, but that now it takes longer to fill up vacant rentals. ‘Our workforce here is dwindling,’ Milani said.”
The Daily Press. “It’s no secret that construction has slowed on new homes in the Victor Valley and workers are feeling the pinch. ‘Since the beginning of the year, our lobby’s been full,’ said Robert Lovingood, president of (a) local staffing firm. ‘We have a steady stream of people looking for work…especially those in the construction trades.’”
“Few semi-skilled workers, especially those who have been working on mass-produced tract homes, are equipped to transfer over to commercial work. ‘They’re programmed to do one thing in every house,’said Chris Cox of Cox Plumbing. ‘They’re set up to do one particular phase of plumbing, and that’s all they know. It’s electricians, it’s framers, it’s everything. They only get the opportunity to do just ceiling fans, just switches and plugs.’”
“For workers who know houses, life is bound to be tough at least until summer, possibly another year, said economist John Husing. ‘You have to work off the inventory of new homes that was just completed,’ he said. ‘A lot of builders kept right on building up until December because they didn’t want vacant lots on their books.’”
“Another factor, Husing said, is homeowners who got into interest-only loans and cannot refinance because their homes did not appreciate enough. Third, speculators who tried to flip houses one-too-many times are trying to get out of the market.”
“Those three factors have put inventory of both new and existing homes at its highest point in years. For existing homes, the amount of homes for sale in the Victor Valley tripled in December 2006 compared with December 2005; from 1,123 homes to 3,455, according to the local MLS. And existing homes are competing with new homes as buyers hunt for bargains.”
“Some construction workers are transferring over to warehousing work, said Gloria Stanton, manager of the Victorville office of Select Personnel Services. ‘I’m hearing, I’ll do anything,’ she said, not only from construction workers but from educated professionals such as paralegals and accountants.”
“Cox said out of 10 housing contractors he used to work for, he is only working for two at the moment. ‘It’s a cycle. It’s like anything else,’ he said. ‘You ride the wave until it dies and wait for it to pick back up.’”
We are moving this site to a larger platform. There will be some glitches over the next couple of days and it will be running slower until the change is complete, due to a temporary database work-around. Sorry for the delays.
hehehehe …. wipeout.
Overall, waves are pretty safe.
Except for when they interact with terra firma. Like wet beachsand or jetties.
That is when the big injuries happen. When a wave is dying out you are close to terra firma and a number of people are going to receive spine snapping injuries (figuratively speaking).
Oh yeah, and go ask a surfer about enduring flat spells. The housing market is looking down 3-4-5 years of a flat spell, if the historical pattern holds.
“When a wave is dying out you are close to terra firma and a number of people are going to receive spine snapping injuries (figuratively speaking).”
I can attest to that. Years ago, while body surfing at Huntington Beach (total rookie), I rode a wave in which ultimately picked me up and slammed me square on my head on the ocean floor (since the wave had sucked the water out). I sustained an extrordinarily painful spine compression which took months (and several visits to the chiropractor) to get over. Not fun.
yeah, as an ex-Santa Cruzan, I remember - I always got hurt (and dinged my board) trying to ride the small stuff.
LOL, Try the Mavericks…up north
Sounds like zuma beach waves.
Or Newport at low tide.
And sandbars!
I body surfed the wedge. I am still living to talk about it.
CdM shorebreak survivor.
surfed my 18 ft bayrunner 40 hp fishing boat back from Anacapa Island in 50 mph winds and 8 ft cresting seas and didn’t spill a drop of beer.
RMOFLOL…!!!
Commercial fished for King crab and Opilio Crab on the Bering Sea in Winter for 15 years and here still. Whew!
You Win!
And from the Reno Gazette Journal, as always (over and over and over), area home prices continue to decline, but the worst is over: http://news.rgj.com/apps/pbcs.dll/article?AID=/20070130/BIZ12/701300334/1071/BIZ
From the article:
“2007, we’ll see some further weakness in prices mainly because people are getting squeezed by the creative financing that they used to buy some of these houses,” Cargill said. “The fed is likely to start raising interest rates, probably not the next meeting, but it’s probably not too far off. And, though we’re not near as bad as Las Vegas, there is still a speculative element here that has driven up prices.”
However, the active listings on the MLS continue to fall, dropping to an average of 3,278 for the metro area during the fourth quarter, which is close to what is considered normal for Reno-Sparks.
Do they not realize that the only reason area inventory returned to a more “normal” level during the fourth quarter is because of all the expired and removed listings??? And since when is 10 months of inventory considered normal???
Just a couple more months before the blind optimism dies in the face of no spring bounce. It’s going to be quite a spectacle to observe up here in NNV.
From the article regarding rents: “‘If you price yourself out of the market, you won’t have anyone,’ said Ken Degney, owner of Assist 2 Sell in Kings Beach and Incline Village.”
This is the case just “off the hill” here all along the 395 corridor. Infact, rents are the same now here as they were in the late 90’s. I talk to a couple of property managers frequently and the stories they tell are all of desperation. This fall it really began in earnest people calling to rent their flip-turned-rental. Most want to rent far above what the market will take, and the property managers won’t take them on. The ones that do rent are taking a huge ass-kicking. My wife, who drives about more than I do, tells me it was like a disease seeing all the “for sale” signs turning to “for rent” signs, and most of these for rent signs are still in place. So, does the MLS tell this story. Common sense says what? That the dam is about to break, and infact is breaking.
I got a chance to talk to a master carpenter who lives on Lake Tahoe the other day. I asked him if it was slow there and he said, ‘it’s slow everywhere!’ It’s all remodel work now, he said.
Was just up in Truckee yesterday. Saw a few projects which appeared to be at a standstill. I just shake my head as I drive down main street. What used to be full of retail and restaurants has been transformed into realty, mortgage, and title companies. Not good for tourists since, come evening time, these businesses are closed and dark. It’s not the warm feeling people had come to appreciate there. Now there is talk of only allowing those businesses on the second floors. DUH! Too little too late though. It is going to take years to sort out the mess this mania caused. And the skiing is horrible this year. No snow to speak of in almost a month. That is sure to put a dent in the rental market. Lots of properties are going to come on the market in Tahoe for the foreseeable future.
“And the skiing is horrible this year”
I hear ya. Talk about adding insult to injury. At least with having a good snow year some part of the local economy would fare well, but here we are at the end of January and we’re looking at rocks. Not good for the resorts, not good at all. So throw that on our mounting heap of troubles.
“Now there is talk of only allowing those businesses on the second floors.”
Something tells me that problem will work itself out.
I remember hearing a report on NPR in the late ’90s. San Franciscans were complaining because all of the old lofts were being snatched up by dot-com companies. The prices were getting very high and nothing was available for any other businesses. Two years later that wasn’t a problem at all.
Luckily the Real Estate Mania came along or those San Fran lofts would probably have lost a ton of value. Maybe there will be another Beanie-Baby mania to occupy those places in Truckee (wherever the hell that is) come 2010.
Truckee is on Hwy. 80 between Reno and Sac. It’s near Donner Lake where the Donner Party ate each other when they were snowed in in the winter of 1846-1847 - yep, great winter weather there!! It’s a quaint little town with an old time main street that used to be full of quaint little shops and yummy restaurants. Now, mostly real estate occupies the spaces.
“What used to be full of retail and restaurants has been transformed into realty, mortgage, and title companies.”
No $hit! You’re not kidding. This can be said for so many cities/towns in CA. There simply is not enough demand for this many offices, at least not in a normal market. Who will lease these spaces once the downturn really starts pecking these guys off? And still we get the shills stating that commercial will pick up residential’s slack.
Haven’t you guys heard? Real estate speculation is the new tourism!
rob
Speaking of dot-coms taking up space in San Fran. I now live in LA (per my handle), but used to visit my uncle in SF in high school and college. He bought a loft in ‘95 on Petrero Hill with a georgeous view of the city. When I visited in 2001, a dot-com company had built an extra floor on the building across the street, detroying half of his view.
…they never ended up moving into the building.
I remember that whole mania well, because I lived in through his eyes (how he made his money … well, I should saw how he got into his condo). These days, he’s “cashed out” every penny of available credit on his loft, … all with neg-am loans.
I know the Calfornia mentality well. That’s why I believe in this bubble.
Hi all,
HD74…you lurking by any chance?
California is sinking. Love it. Go down, Arnold and Co.
Love it, me too. It’s like Arnold’s muscles. All steroids and drugs.
Dont blame Arnold for the mess left behind by Davis.
Dukemejin and Wilson were great Govs to. Far better
then Brown or Davis. Poluski and Fienstein are too embarssing
to mention.
Flatffplan has a twin brother in California.
At least attempt full sentences and spelling.
It may be too much to ask for some reasoning as well.
this guy wil still have a job
Clovis Community and Economic Development director Michael Dozier conducted surveys
Hard for me to tell …. but I think there might be a political party affiliation detectable in this post…..
LOL!!
LOL!
LOL! and I COULD REALLY USE SOME SCOTCH!!!
Don’t you guys know it’s time for Patron?
Or silver Chinaco!
Did somebody say SCOTCH!
lagavulin!!!
I’m sure the Runaway Bride (Nancy Pelosi) will fight for bailouts for her constituents. Won’t that be great when she is asking for taxpayer dollars to bail out all the phony Bay Area snobs in their precious palaces?
Disclaimer: I like the Bay Area. I have spent more than 6 months out there so don’t think I’m knocking the Golden Gate Bridge.
You got that right NYCityBoy! Do you want to pay higher taxes because some moron overpaid for their California rancher! Hell No! Not you or me! Cheers!
Hey, I am born and raised in Bay Area. The people I know live in older smaller houses, don’t participate in conspicuous consumption, and tried to raise our kids to shop using the operative word ‘Sale’ and to not feel entitled. These people that MOVED to the Bay Area and started acting like they DESERVE a ‘luxury starter home’ and the kids DESERVE to drive (and wreck) new BMWs and Toyotas when they get their license….they really piss me off. They drive their big SUVs that are aimed right at my head becasue I’m driving a Ford Focus, they think the rules are for everyone else except them, and they buy these huge houses that waste resources. I just got my PG&E bill, and it’s about $120 higher than usual cause of the cold snap. I am laughing thinking what those big McMansions cost to heat this month!!! Anyways……. They are not Californians - they are immigrants from all over the world and the rest of the U.S. and they give the rest of us good folk (and there are lots of us and we are as mad about housing prices as you all are cause our kids can’t live near us) a bad name.
bedub,
Right on, dude. I live in the bay area now but was born and raised down the coast from here. I am always amazed at how many of the conspicuous clowns you mention are from far away. If you want to pay stupid amounts of money for homes, cars, and clothes, go do it elsewhere, PLEASE!
You both got my vote on that!
I hear that. I’m third (that I’m aware of) generation Northern CA, and I’m still renting as I watch all sorts of nutty things going on around here. It frustrates the hell out of me.
I’m EX-NorCal for the reasons you all mentioned. I tried to buy a house on one income 12 years ago…finally gave up and went to rain country. Many fewer fancy cars around here - but some equity spenders nonetheless.
NYCityBoy,
This is my opinion: No bail out for anyone, bay area or otherwise. If I make an idiotic investment in Pets.com, trying to achieve a little nest egg, should others have to come to my rescue when it crashes to $.10/share? Hell no! Let all the overleveraged a$$hats burn.
Agreed. But I don’t see a bailout coming. Florida is already crashing, and no one on Capitol Hill has mentioned bailout yet (at least that I’ve read). They’re only talking regulation at this point, which would only help the bubble to deflate faster.
If any bailout does come, it would have to be national. Well…maybe “bi-coastal.”
SFer, check out Sen. Dodd and Maxine Waters.
For decades, many new Silicon Valley homebuyers could not keep their mouth shut and openly gave out their employers name. Therefore they paid more, because realtors just spiked the price higher due to high income and not the actuall value of homes. That ended in 1991 when many lost their jobs and prices tanked. This again happened with the stock options cash out of 1999. Too rich and too stupid on how to manage their money. Therefore realtors spiked the prices again. If your rich enough you can pay more for a 40 year old rancher. Again too stupid to have that kind of money. Heaven forbid you rear end someone with your new BMW, given California laws, you could lose everything. Thats why many rich SV CEO’s actually have a bonded driver take them to work. I kid you not. I actually heard a couple of Google employees actually dont discuss where they work for fear of being ripped off by realtors when they are buying their home. I think one should go in stealth when talking to realtors. They less they know the better your off.
I just want to ask some facts to the post by Louie Louie. We were looking to buy a house in Sunnyvale around 1991. Some of the houses; especially the big ones lost 40% of its values from the peak and they were sitting empty. The onwers were relocated due to jobs and they were not selling. I had the realtors pulled the info for me on several streets and I calculated the numbers myself. That gave us a chill on our spines. The realtors back then looked at our income and refused to show us houses that they thought we couldnot afford (3 times our incomes was the formula). Back then we were young and pretty ignorant about the housing market. We started looking again in 1994 and this was the time the housing market started to pick up. Our “buyer realtor” (we asked him to sign the contract) refused to make offer on a house for us becasue we didn’t listen to him to offer $15K more than the asking price to bid with other offers. He was so surprised that we backed out with no argument. We then watched in awe as the housing prices took off with the tech bubble. We barely survived riding out of the retrieving wave of tech bubble. We moved to OC. In 2005, I was hounding by people to buy a house or I will be priced out forever. As the matter of fact, my sister whose house doubled in value told me in Jan 06 to “just close my eyes and buy a house.” I had to bite my tounge. I was already reading Ben’s blog for almost year then. We are still renting. We never got in the bubble in the BA and this bubble, we can wait a few more years. This time we will watch this housing bubble safely from afar. As my husband told me every other day, “I sleep very well at night renting.” Thanks to Ben’s blog. And folks, I have learned that home is where the heart is, the very hard way.
“I was hounding by people to buy a house or I will be priced out forever. As the matter of fact, my sister whose house doubled in value told me in Jan 06 to “just close my eyes and buy a house.”
Am I the only person on this planet that doesn’t give a flying cow-fart if I am ever actually “priced out forever”?
The best things in life are still free and no amounts of brick, granite, stainless steel and linoleum will change this.
Disclaimer: I would put Jack Daniels in with the list of the best things in life. But you get my point. That’s the only one that isn’t free that I really treasure. Oh yeah, and beer.
Ah, alcohol…the cause of, and solution to, all of life’s problems.:)
Nice. The Simpsons quotes come out.
“I’ve found life to be one crushing defeat after another until one day you wake up and you just wish Flanders was dead.”
This will be the feeling of many of the FBers soon.
I bet the house that Homer & Co. built for Flanders, after the hurricane, was built better than many of these California McMansions. “Shod-didly-oddily”.
I move to Mountain View in ‘91 and have been in the area since. If the point is NOT buying a home since 1991 was a good decision for Sunnyvale and area I’d have to say “it wasn’t a good decision.”
Buying in SV sucks and most realtors suck. We did not have a great experience with our realtor or seller but the point is to think and act in the long term.
Buying a home 10-15 years ago would have saved more $ than renting and one would have avoided unfair rental hikes during the dot-com boom. Renting back then was hell and motivated us to finally buy.
The point of my post was never about “not buying a house in 91.” It was about the fact that the house values dropped up to 40% after the housing bubble in the late 80s.
And you are right. Houses in SV suck and so are the ones in MV and all over the BA for the asking prices, then and now. The BA was never striked in my heart to be where I want my home to be, then and now. Sure, we could use the appreciation since 91 and the savings on all of those money we “threw away on rent,” but it was not the money that I am after. Every person’s life journey is different. It is not just the outcome but what one learns along the way is as well as important. BTW, the apartment I rented in SV didn’t raise our rent to the market rent at the dot com time. We paid at least $400- $500 cheaper than the new comer for the same apartment during the entire dot com boom.
JTZ,
After the reply post, I did some memory search and remembered why we didn’t buy. Our incomes (salaries of two 5-years engineers) only qualified us to buy a town house in Sunnyvale in 91 with 20% down of course. These town houses were in hideous locations or right on the busy streets, the interiors were dark and the real deal killer was the $200 -$250 HOA per month. We tried to look at the SFRs that we “might be” able to afford if we stretched to the max which meant cut every thing to the basic and had to borrow family for additional down payment to cut down the mortgage payments, we then can afford houses on very bad locations like on the busy streets of Fremont St. or Wolfe. Money borrowed from the family has to to be paid too. That is not much of a life, isn’t it. I guess the HOA of $250 back then is like $800 HOA now with those high rises in Irvine. We looked in San Jose and Fremont cities. One time, my husband and I drove to Fremont city from work on Friday after work to test the traffic. It took us only 2 hours and a half using the carpool lane when ever we could to get to house we were interested. I quit but my husband didn’t. He did the test drive one more time by himself without telling me. I remembered greeting him home that night and wondering why he was so late. He looked beat and said “Alright, we have to give up the idea of buying in Fremont.” Spending 3 hours + per person during the week on trafic for a house is not our idea of a life. Housing is an expense and I guess, I didn’t want to spent my hard earn money where my heart is not. I have a friend who majored in finance and is very sensible and extremely practical with money who are still renting like us. If I ask she can run through the numbers at any moment on the cost difference of buying and renting. Of course, she cannot account for fraud and greed in the time of any kind of bubble. And the apartment she is renting in Mountain View always give her a very good deal below the market price even during the bubbles. I guess we were and she is good renters.
But buying a home in Mountain View ? The number one Superfund clean-up site in the country?
Actully that would be Sunnyvale and Santa Clara. Fomer sites of Semiconductor MFG sites. Hard to miss close to National Semi + Intel off Bowers and AMD in Sunnyvale. Not to mention 100’s of other sites of dead companies.
Therefore realtors spiked the prices again
Is it really necessary to respond to this? Realtors cannot “spike” the prices. People can sell their houses ONLY for what buyers are willing to pay. It is the buyers who are responsible for the ridiculous prices, not realtors or sellers.
It is subprime loan dealers selling the mortgage market’s answer to crystal meth who are responsible for the ridiculous prices, not buyers, realtors or sellers.
See the desert sun today for a shocking piece of garbage about the real estate market being back on track. It is an amazing piece of crap (citing a bunch of realtors as experts). I posted a criticism… it seems clear that the reporter must have a house in Riverside County that he is (or is planning to sell) and he wants to keep the market bouyed up long enough to unload. I expecially find the fact that the reporter fails to point out the Dataquick “monthly sales” include foreclosures (which are supposedly at an all-time high), especially since I emailed him weeks ago about this fact…
See article and comments at the following URL: http://forums.desertsun.com/viewtopic.php?t=3246&start=0&postdays=0&postorder=asc&highlight=
IMHO the Desert Sun is not known for good investigative journalism. They tend to hire young, inexperienced reporters who don’t know how to challenge what they are told and don’t seek out contrary opinions.
I am as shocked as you are. That was truly one the worst pieces of journalism I have seen so far. The Sun is bought and paid for - this is obvious if you read religiously as I do.
Even the table accompanying the article makes no sense. The Sales Count does not add up to 874. I suspect they left out the new home sales or established home sales. In any event, this is a truly pathetic “advertorial” by the elite journalism staff at the the Desert Realty Times, er Sun.
I suggest you keep bombarding the reporter with the truth about the collapsing Coachella Valley market. Mention the new home sales “tweaks” such as the foreclosures issue you mentioned and also the cancellations issue. Also mention the rampant fraud that I have reported on. The cash back at closing deals, etc.
It is doubtful you will get anywhere but why not at least make him feel a twinge of conscience, if he has any left.
Hey Scutter…
See you are on the DS hammerfest. I post over there occasionally as Robbie.
An amazing piece of reporting cr@p. My hood hasn’t sold squat recently and prices are still too high. Realtors don’t appear to understand they screwed the pooch, qualified buyers are gone.
Investing in second homes up in Sacramento from Bay area is noting new. I’ve had co-workers since as far back as 1982 and as recent as last year telling me they just bought a rental propert in Sac. Those that bought long ago have obviously done very well but their depreciation and usefull life is just about over so may be prone to sell in the next few years.
Here’s an article that indicates prices are still rising
in S. CA (see chart at bottom):
http://www.realestatejournal.com/buysell/markettrends/20070129-fletcher.html
METRO AREA* 4Q 2006 4Q 2005 PERCENT CHANGE DIRECTION
St. Louis $858,500 $925,000 -7.2% [Down]
Edison, N.J. $875,000 $937,500 -6.7% [Down]
Miami-Miami Beach-Kendall, Fla. $876,250 $915,000 -4.2% [Down]
Chicago-Napierville-Joliet, Ill. $870,000 $900,000 -3.3% [Down]
San Francisco-San Mateo-Redwood City, Calif. $870,000 $888,000 -2.0% [Down]
Santa Barbara-Santa Maria, Calif. $910,000 $925,000 -1.6% [Down]
San Jose-Sunnyvale-Santa Clara, Calif. $849,500 $860,000 -1.2% [Down]
Riverside-San Bernardino-Ontario, Calif. $850,000 $858,000 -0.9% [Down]
Charleston-North Charleston, S.C. $937,500 $942,500 -0.5% [Down]
Nassau-Suffolk, N.Y. $885,000 $886,000 -0.1% [Down]
Philadelphia $900,000 $899,900 0.0% [Unchanged]
Seattle-Bellevue-Everett, Wash. $880,000 $880,000 0.0% [Unchanged]
Oakland-Fremont-Hayward, Calif. $870,000 $870,000 0.0% [Unchanged]
Washington-Arlington-Alexandria, D.C.-Va.-Md.-W.V. $861,000 $860,000 +0.1% [Up]
Los Angeles-Long Beach-Glendale, Calif. $877,000 $875,500 +0.2% [Up]
Phoenix-Mesa-Scottsdale, Ariz. $887,660 $882,020 +0.6% [Up]
Atlanta-Sandy Springs-Marietta, Ga. $872,500 $862,600 +1.1% [Up]
Newark-Union, N.J.-Pa. $885,000 $875,000 +1.1% [Up]
Baltimore-Towson, Md. $889,330 $877,000 +1.4% [Up]
Sacramento-Arden Arcade-Roseville, Calif. $878,000 $865,000 +1.5% [Up]
Cincinnati-Middletown, Ohio-Ky-Ind. $925,000 $910,000 +1/6% [Up]
Dallas-Plano-Irving, Texas $889,200 $875,140 +1.6% [Up]
Houston-Sugar Land-Baytown, Texas $916,870 $897,750 +2.1% [Up]
Bridgeport-Stamford-Norwalk, Conn. $930,000 $907,500 +2.5% [Up]
Richmond, Va. $990,000 $960,000 +3.1% [Up]
Bethesda-Gaithersburg-Frederick, Md. $895,970 $869,000 +3.1% [Up]
San Diego-Carlsbad-San Marcos, Calif. $900,000 $870,000 +3.4% [Up]
Salt Lake City, Utah $929,670 $896,420 +3.7% [Up]
Minneapolis-St.Paul-Bloomington, Minn.-Wisc. $935,000 $899,000 +4.0% [Up]
Oxnard-Thousand Oaks-Ventura, Calif. $900,250 $865,250 +4.0% [Up]
New York-White Plains-Wayne, N.Y.-N.J. $906,750 $870,000 +4.2% [Up]
Santa Ana-Anaheim-Irvine, Calif. $917,750 $880,000 +4.3% [Up]
Areas with 100 or more “starter luxury” sales.
All due respect but, uh… what’s your point? L.A. “starter luxury” median is up .2% in a year?… That in itself is a nightmare for many. 4% “gains” in other areas? Compare that to 04-05 gains. The trend is down. Are you saying that this somehow indicates prices will *never* go down here? If it’s frustration you’re feeling, I can certainly relate.
Other than that, this really means very little in the grand scheme of things. Just that fact that the article it came from is titled “Low-End of Luxury-Home Sector Shows Some Signs of Chill” is a hopeful sign.
From the article:
“In many parts of Southern California, prices are still on the upswing, although analysts such as Celia Chen, director of housing economics at Moody’s Investor Service’s Economy.com, says the area is at “high risk” for a fall. Although the local economy is strong, incomes haven’t kept pace with the sizzling double-digit price increases these markets experienced from 2001 to 2005. And with federal regulators pressuring lenders to cut back on creative financing, fewer buyers are able to stretch their incomes to buy million-dollar homes.
That’s what banker David Jaffe discovered when he put his five-bedroom stucco home in Ventura, Calif., on the market 2½ months ago for $979,900. Ventura’s prices are still rising — they increased 4% from 2005 to 2006, the study showed — and Mr. Jaffe attracted an offer close to his asking price soon after he listed it. But the deal fell apart in escrow when the buyer couldn’t qualify for the loan.
Mr. Jaffe bought the place in April 2005 for $935,000 in a bidding war, and still hopes to find someone who will meet his asking price. But he doesn’t expect to see lines forming at his door, especially since homes in his price range are affordable to fewer people and no longer have quite the cachet that they once did. “The market is changing,” he says. “It’s definitely a buyer’s market now.”
Sounds good to me…
Does any really ever win a bidding war for a house? It seems more like a phyrric victory to be the GF
I remember back in 2000 (towards the end of the dot.com craze) - a co-worker of mine and her husband bid $250,000 over asking price for a home in Belmont CA (fairly nice town on peninsula btwn SF & Palo Alto). I believe the asking price was $1M. Things have been crazy in the Bay Area for some time.
The research was paid for by the NAHB. What else would you expect the study to conclude?
As posted earlier, it’s been my suspicion for some time now that lainvestorgirl is a bull in bears clothing.
Since all her posts essentially say “So Cal prices are not going down!!!”, I would tend to agree, though I can understand how the molasses like movement here can be frustrating. Popcorn?
I am not so quick to scream “heretic!” But I think she is just relating her observations in her price range. I suspect that upper crust west LA will be slower to fall than other areas, so she will have to be patient. Besides, it is more interesting to have folks who relate facts rather than what we want to hear here.
She just observes what she wants to observe. We’ve sent her links to the la times charts that show declines in LA areas across income ranges. She says she’s too busy to look at charts. If she did she’d see many YOY negative numbers including swanky LA areas, some 15-20%.
http://www.dqnews.com/ZIPLAT.shtm
like the blind man squeezing the elephants nuts and saying “it’s a bunny rabbit”
LOL! Damnit where’s that SCOTCH!
Alright, alright… HERETIC!!!
I guess you haven’t had the experience of watching 50 year old, two bedroom ranch style shacks with no more than 1400 SF of space and 5000 SF of land selling for $1M+, while everyone is partying over a crashing RE market?
Still can’t believe some of the percentage change of 33-45% yikes!
I still can’t believe people were paying 700-800k for a post world war II prefab 3 bedroom stucco box in Culver City.
Sounds just like something a HERETIC would say..do some reading on GALILEO LA Investorgirl….
Just kidding. Feel free to run against the grain, some of us actually appreciate reality. In small doses.
And Manraygun, I thought we agreed last time you pulled that out that your chart sucks, Santa Monica, Century City, many areas in the Valley and even Compton are up double digits.
Twasn’t manraygun who agreed. I have no difficulty imagining 400k drops on 1M POS’s.
Zillow me this investorgirl:
1515 murray dr 90026
06/23/2005 FB pays $929,009, foreclosed and sold 10/23/2006: $682,351
I’m sure there are other more spectacular crashes occurring as we speak, but I happened to live across from this particular train wreck. (PS the idiot who bought this rather nice house for 929K was paying going rate at the time–it wasn’t overpriced for 6/05, so no doubt others in the area are in the same or leaker boat.)
Cant speak for the person in question. But for myself it is very frustrating not to see drops yet. In fact on CNBC this morning there was someone today talking about the risks of the housing downturn. He was saying it was across the country - except Portland/Seattle. And very frustrating for someone in the NW waiting. Meantime condo’s continue to sell out in downtown Seattle.
Now show me a significant drop in value for a property that was NOT a foreclosure, and maybe I’ll be impressed.
Hey Manray, I notice you live right near my rental property in Koreatown, by Normandie and Melrose, are you interested in property management
The peak wasn’t that long ago. With sellers holding out for their price, there won’t be any significant drops in prices that aren’t foreclosures for a long time.
We’ll see the drop in price in the comps. A home that sold in 2005 will sit while a home bought in 2003 might be sold for a lower price (but not at a loss for the previous owners), etc.
Foreclosures are going to be required to clean out this problem. That’s the nature of most assets; People hate to realize losses.
Give it time. L.A. won’t hold on past the fall. Why? Look at the businesses that represent most of the 6 figure salaries in LA. Most of their pay scales stop below $200k/yr (with their typical employee being paid 5 figures).
These companies are having a very tough time hiring. Engineering, banking (non-mortgage), etc.
Click on the housing affordability survey at demographia.com. Notice something? LA is the least affordable city in the world. Homes trading for 11.4X income.
That’s unsustainable.
I’ve watched to drops in housing prices occur here in LA, I’m about to see the third. The most overpriced areas dropped 40%+ from their peak last time. This time the peak overshoot fundamentals by far more.
Got popcorn?
Neil
Now show me a significant drop in value for a property that was NOT a foreclosure
Are you saying that a foreclosure is not at market price? How magnanimous of the foreclosing bank to give away real-estate at below-market prices!
“Hey Manray, I notice you live right near my rental property in Koreatown, by Normandie and Melrose, are you interested in property management?”
Wrong again, investorgirl. Silverlake is not Koreatown, nor is it “right near” normandie and melrose. Okay so salient details aren’t your forte. But please, do post the addresses of your investment properties. I’ll take a look and perhaps make you an offer when they lose 50% of their value (if they haven’t already).
Be careful, you’re within cockroach walking distance of my tenants.
It must be pretty close, because I get your priced-out gay guys.
“Santa Monica, Century City, many areas in the Valley and even Compton are up double digits. ”
The only thing causing prices in Compton and scentral zips to go up double figures is loose subprime lending standards/massive fraudulent overappraisals/0 down stated income neg am option pmt loans/ect to inner-city immigrant families. Fraudulent lending is rampant in such inner-city ghetto areas as compton, ect. Why? Because there is no gov’t oversight in these blighted third-world slum areas. Take a drive along jefferson Ave, slauson,florence aves east off the 110 right thru the heart of Scentral and witness the amt of garbage,furniture, trash strewn all over the streets and alleyways and tell me whether the Gov’t gives a rats ass what goes on in the inner city cesspools. Ditto for fraudulent lending/appraisal fraud/overpriced compton POS crack shacks. Then look at the double digit YOY gains in such s*ithole LA areas as Compton, Inglewood,SGate,Huntington Park, Maywood,Cudahy,Wilmington,Zips 90011, 90001, 90248, 90037,90059, 90064,all inner city S*ithole zip areas, and maybe there might just be a bit of fraudulent lending run amok.
If the LA times actually decided to do a little investigation into Scental Fraudulent Lending practices instead of doing sugar-coated puff pieces on the Latest hollywood/sports star to purchase a 5 million$ brentwood mansion , then it would send shock waves thru the LA housing market and maybe result in more downward price pull, but the LA times is all about being a prop-spin organ for the LA REIC than in doing real hard-hitting investigative journalism into the dark underbelly of subprime Lending practices in Inner-city minority hoods.
“Santa Monica, Century City, many areas in the Valley and even Compton are up double digits. ”
Riiiiiggghhhttt! I love it. I regularly run by prestigious AP Real Estate on Main Street in Santa Monica to get a list of properties for sale and even have owners, Peter Mullins and Allison St. Onge, show me something from time to time. Their listings are at http://www.aprealestate.net/ and people are rushing to West LA to drop $1M for a three bedroom townhome because of Peter and Allison and their wonderful sales team. Ooopss, Allison is gone now and Peter is the owner… but NOBODY knows Santa Monica real estate better than Peter Mullins. I just love Peter’s smiling face and I see it almost everywhere now, signs on most corners, his name is almost everywhere… even at
http://www.foreclosure.com/search.html?st=CA&cno=037&z=90405&tab=p
Yeah, the westside is still skyrocketing… that’s why there are so many investors rushing to invest there… lainvestorgal, you go girl! You tell ‘em!
Joe Isuzu
“90011, 90001, 90248, 90037,90059, 90064,all inner city S*ithole zip areas, and maybe there might just be a bit of fraudulent lending run amok. ”
Error in typing in 90064, which is Rancho Park zip, an upscale section of westside near Century city. Meant to type 90063,90061 and 90044. More LA Slimbucket zones with 10-25% yoy % increases.
Note: Sorry to miscast Rancho park as an inner-city s*ithole district. It is actually a small quiet unpretentous westside neighborhood of mostly sfh’s but located minites from westwood, century city, bev hills- right smack in middle of all the westside hi-end stuff.
“it’s been my suspicion for some time now that lainvestorgirl is a bull in bears clothing.”
Nah, she’s just impatient. LA is being a tough nut to crack.
She’s the kid in the back seat who keeps droning “are we there yet?”, when you only pulled out of the driveway 15 min ago and have a 5 hour drive to go.
posted ” She’s the kid in the back seat who keeps droning “are we there yet?”
That is spot on! This nutty drive will take awhile and in any ways no matter how smart the wise-guys are the end will have pleanty of crap for all.
She’s the kid in the back seat who keeps droning “are we there yet?”, when you only pulled out of the driveway 15 min ago and have a 5 hour drive to go.
The same kid you send to the bathroom and conveniently “forget” at the truckstop.
Nah, she’s just impatient. LA is being a tough nut to crack.
Most of LA resembles Beirut, but with more gun fire. Did I say more, yes I think I did.
Yeah, but LA has the La Brea tar pits.
Somewhat funny was an earnings call I listened to a few months back it was Valley National Bank and the top guys of the company were laughing about how the sht will hit the fan. They are an old style lender and didn’t alter their standards during the boom because they knew whats coming next. They were chuckling saying that when the liquidity dries up the banks holding the originated crap will fall like dominos.
“Most of LA resembles Beirut, but with more gun fire. Did I say more, yes I think I did. ”
If you replaced those multi-million $ estates up in the hollywood hills with some third-world ‘colonia’ barrios LA would be exactly like Tijuana. Guatemala City or any other third-world squalid City(Ciudad).
Subtract the relatively small LA westside and the rest of LA is a slightly more civilized version of Baghdad.
“Yeah, but LA has the La Brea tar pits. ”
And just like those Mastodonians, Sabertooth tigers, and the other ancient Wildlife which got sucked into the tar pits so will the legions of Fb’ers get trapped and drown in the Morass of the LA RE bubble collapse.
Bulls have made a shItload of money over the past 6 years. The past 4 of them have been nuts where fundamentals would suggest having bailed. Staying in took a lot of balls and very little brains.
Kinda late to get out but not too late. There’s a lot of pain in store for the bulls over the next 3 years. Better to get what the market will give you today and still take a profit.
Sorry BubblePopper, but I disagree. It only took balls if you were playing with your own money. Not many were doing that. I think that most of them had no balls and no brains. They were running on blind greed.
On another note, do an elephant’s balls really feel like a bunny rabbit?
I cannot answer the testicle query, but I have a related anecdote.
True story. I once took a safari in Sri Lanka. A large male elephant took an interest in our jeep-I had a seat at the very back. You do not know fear until being chased by a lust-crazed elephant with a four foot erection….perhaps that’s how the FBs are feeling now…
“On another note, do an elephant’s balls really feel like a bunny rabbit?”
No. That’s just something the blind man likes to say when ever ever he’s engaged in one of his favorite hobbies…squeezing large mammal nuts.
How does staying in take balls if you’re convinced prices will never drop? No courage required for (presumed) sure things.
Right. It’s like being oblivious to the fact that squeezing elephants balls indefinitely will result in getting your head flattened. Saying “nice bunny” till it happens doesn’t mean you’re courageous, just lucky.
You do not know fear until being chased by a lust-crazed elephant with a four foot erection….perhaps that’s how the FBs are feeling now…
——————–
ROFLMAO!!!!!! Too funny!
YOY prices may be up a measley .2% but in the last 6 months they are down easily 10%,i am seeing many price reductions in los angeles and the sales volume has come to a standstill.Yes Los Angeles is crashing finally.
Oxnard-Thousand Oaks-Ventura, Calif. $900,250 $865,250 +4.0% [Up]
Doesn’t jibe with my experience in Westlake Village, where prices have fallen in my zip from $1.1M to about $885K, but there are very few new homes here. In Oxnard, most of the sales are probably new homes on farm fields that don’t yet have drive by shootings so prices may have risen there somewhat.
What the hell is a “Starter Luxury Home.” Is this one of those accessories rich kids pick up along with that law degree from Pepperdine? Do the grandparents pay for these too? Jeez this market is annoying beyond belief.
This data tells us precisely nothing by itself. If you track down their definition of “starter luxury” you find that it is a house that sold for between $750,000 and $1.25 million. We are given no clue about square footage or location differences in the houses that sold in this range in 2005 vs. 2006 so we learn nothing about price trends from this data. It could be that a whole lot of houses that sold for $1.5 million in 2005 sold for $1.25 million in 2006 (thereby raising the average).
If you track down their definition of “starter luxury” you find that it is a house that sold for between $750,000 and $1.25 million.
If that’s the case, doesn’t that explain the problem? They tracked houses near $750k last year, but those have dropped out of the range, so they’re thrown out this year. Meanwhile, others have entered the range as they dropped below $1.25M. Basically, they’re taking the average of a price window… should they act surprised when it barely ever changes?
Great observation. This is why it is very hard to tell where the market is at from a sheer numbers standpoint. While sales in a certain price range may not have fallen off that much, the quality of homes sold is A LOT better.
Meager appreciation rates…these are all trending down. Get a grip girl!
“Rama Ambati, a relocation specialist, said that she used to get at least 25% of her customers from the Bay Area. Now, she says, ‘it has dwindled off.’”
This is great news for those of us burned by the roving eye of Sauron (i.e., within the range of Bay Area retiroflipperinfestors!). Folks in Arcata/Eureka, Ashland, Auburn, Bellingham, Bend, Bishop, Bozeman, Brookings, Chico, Coer D elene, Clovis, Dunsmuir, Eugene, Grass Valley, Hood River, Mount Shasta, Placerville, Portland, Quincy, Redding, Reno, Sacramento, Seattle, Susanville, Tahoe, Truckee, Wenatchee, and Yreka will all be rejoicing to hear such news. And now that the tsunami has dwindled, when will the tide start sucking back from whence it came…
Susanville…Susanville? I lived there for a few years. There is nothing there but a big lake to fish in and one of the world’s largets prisons. Neighborhood I lived in started out with forest rangers, nurses, teachers, and when I left it was all prison guards. Folks retired up there for the good life then complained about lack of medical care and shopping, and it’s 85 miles from anywhere (Reno). I just cannot believe that anyone would be so stupid as to ‘invest’ there.
Lake Almanor was going to be the “New Tahoe” of northern CA. Airport, new ski resort to be built, Bailey Creek GC. Not a bad idea, but the pricing got way out of hand around the only things there: The lake and the golf course. Sales went pretty hot and heavy for a few years, but actually started dropping off there in 2004. That whole area (Susanville, Chester) is just too hard to get to. One hour even from Chico, and you’re right, no services. And by services, I mean ….at times no power, water…locals know how to survive in this country, but most BA or big city folks become disillusioned after a period of time. And when you’ve spent 800k on a house there, yikes!
I know of a builder now stuck with a few partially built homes in this area, and a loan chewing 7k per month. No takers on the one mostly completed, despite price drops.
Lake Al Manure? because that’s how it comes off. Probably made by farming runoffs and then “ReBranded…”
I have really noticed this impact on the Chico market. The pricing in this area was completely driven by the out-of-towner, and particularly the Bay Area. Most of the upper end homes (700k-1M) have been languishing since last summer, and the new program seems to be, leave the house unfinished until you have a buyer. Sell one, start another.
Here are two new homes I have watched:
May 2006 = 879k. January 2007 = 745k. (3 price drops) (MLS=200603207)
May 2006 = 950k. January 2007 = 849k. (2 price drops) (MLS=200606010)
If there is to be a spring bounce, why would these builders be dropping their price now?
They’re dropping because they know what’s coming……. no one.
There is NO local market for $700k-$1M homes in Chico.
I used to live in Chico. I loved it, but I left because I could not find two pennies to rub together. My brother in law owns a little 2 BR cottage he bought in town about six years ago for $85k!!!
He made a good buy. Looking back to 2001 when we moved here, I wish we would have bought several of these homes. Instead, I drug Mrs. L to seeking my dream house. It worked out okay too, but not as well as the lower end homes would have….. they increased 2-3 times, while the upper end went up 50% - 100%. Having never been in the landlord biz though, it was probably for the best.
“I could not find two pennies to rub together….”
That is why I have repeated, if “they” quit coming here, this Chico market is toast. This is the Unemployment, Welfare, Minimum Wage, land of opportunity! The housing price-to-income ratio has to rival anywhere in the nation, and this is a large part of the reason we will likely leave. I have 10-15 more years of work left in me, post-retirement (I hope)….., and the chance of it being here is slim to none.
Yep, good ol’ Chico, I live outside of town now in a very nice rental for a fraction of buying…my two friends that got caught in the bubble had to buy in Paradise as Chico was allready to expensive…the median income here in Butte County is something like $40K….this bubble was so stupid!
It seems like a lot of the neo-equity locusts in Eureka these days are coming from the LA area.
My daughter went to school in Arcata, at HSU. A lot of kids there were from San Diego. Folks in SoCal like it up there because it’s as far away from home as they can get and still be in CA.
John Edwards’ 29,000 sq/ft crib:
http://www.newsobserver.com/134/story/537705.html
He identifies so well with the poor and downtrodden…..
Actually, Edwards claims to represent working people, unlike President Bush, who represents (in his own words) “the haves and the have mores”.
“Some people call you the elite. I call you my base.”
some people call you “Mr President”, We call you our Lap Dog…
Actaully, Edwards DOES represent working people, in court; contingency cases are all most of those people can afford. If a defective product caused me to lose an arm, I’d be hard-pressed to write a check for attorney’s fees to sue Megacorp. And yeah, I couldn’t believe Bush’s line about his base.
For crying out loud…there’s a bunch of smart people here affiliated with both parties, why the hell bring up politics? You think John Edwards doesn’t give a s@# about the poor? Fine. Post about it at a Republican blog.
He’s revolting. Happily, he has not a chance in hell of being elected.
posted ” He’s revolting. Happily, he has not a chance in hell of being elected. ”
I have not seen Gecko latley….. he is probley busy scraping off his GWBush bumper stickers…..LOL
Sorry to anger all of you “hate righty” folks, but John Edwards is a clown.
I’ll take Edwards in a clown suit over Dubya in a flight suit.
Mission Accomplished.
Werd.
yogurt,
You’re corn-fusing me, isn’t dubya in a flight suit looking like a clown from NC…too much, too much…something.
“I’ll take Edwards in a clown suit over Dubya in a flight suit.”
Okay, I generally don’t give a rat’s ass about politics, but that was funny.
people don’t hate righty… people don’t feel Bush is competent to be President of the United States….
Do you?
‘Cox said out of 10 housing contractors he used to work for, he is only working for two at the moment.’
It’s a good thing this won’t spill over into the larger economy.
I was at Home Depot yesterday picking up some fittings sprinklers etc for my new business and it appers that they have little inventory,in fact it looks like they are spreading out parts to fill empty bins and not look like half the shelves are empty.Also both Lowes and Home Depot are selling returned used items at a discount.They have 100 thousand square foot store with only one checkout girl,what a joke.
HD said they were hiring 15,000 contractors ?
in 09 ??
15,000 Associates
I noticed the same “empty counters and shelves” thing at 2 stores a couple weeks back. One was a drug store and the other I forget. It was very wierd as , outside of trully depressed inner city Upstate NY towns, I haven’t seen that in much of the U.S. before, and certainly not here in the PNW.
Then today, a grocery store in my ‘hood started opening up this “dollar store” area. Plenty of those Upstate too, the dollar stores were like Target equivalents there.
Retailers commonly run their stock down a little for year end stock takes - makes it easier to count it all you know.
It’s a good thing this won’t spill over into the larger economy.
LOL!
The housing bubble was not a SV problem but a nationwide and in Cali, San Diego and Sacramento had larger % run ups than the Silicon Valley. It was a bubble NOT driven by stock options.
I agree here: Sure, why let realtors know how motivated you are to buy a home? Maybe than can rig a phony bidding war but really, the reason homes cost more in SV is because that’s what people have been and are willing and able to pay.
IMHO, The major reason there fewer SV residents are leaving SV and making purchases in low cost areas like Fresno is there is more work in SV than before. The 2006 SV job market grew by 33k new jobs and salaries are up. From 2000 to recently, SV had lost jobs so I can see people leaving and cashing out. SV jobs also change, my neighbor works in a fab plant, most of which moved out of SV as part of this restructuring.
BTW, I’ve seen Apple’s CEO, Steve Jobs, driving out of his Palo Alto neighborhood during the AM rush hour. If you’re rich, you don’t worry about being sued.
I’ve seen Steve Wozniak (The Woz)driving an expensive sports car on highway 280 to work one morning. The only CEO here who was well known for having a driver/limo was Jerry Saunders of AMD fame before he retired.
my sister lives in steve jobs hood. he parks his hybrid in the driveway! unlike the malibu compounds.
Sorry JTZ I must disagree.
Stock options made people throw money around like drunken sailors. It often heard “Well its free money anyway” back in 1999.
In fact realtors and lenders were accepting stock options as collateral, many in fact were unregistered with the SEC/NASD. Therefore you cant sell, trade or assign your shares. So many were in violation of SEC rules.
Fact is Stock options heavily tainted home very early. We saw prices nearly double in one-two years in 1999-2001.
Silicon Valley today employes less people than in 2000. It employed more in 1990 than 2000. The trend is down. All manufacturing left years ago for Asia by 1995. This is a long term trend. Much of the job gains in 2005 were from outside of state/country by local companies. Heck Google opened a new office and employees 210 in Charlotte. Why! Business friendly goverment gave them a state and property tax relief. The only way SV will survive is low cost labor. The higher the cost the more likely it will be shipped out. This has been the trend since 1985 when semi conductor companies shipped operations to Asia. The SV bubble has very little to stand on.
BTW - Yahoo CEO has a driver.. I spoke to him. Yes if he causes an accident. They the CEO would liabable and could loose everything. Thanks to Grey Davis, discovery of liability was extended beyond statue of limitation 2 years and could go after every nickle you got. There are some 90,000 lawsuits initiated every day in California.
No offense to any of you Californians, but we really need the big earthquake and fast. Too many really stupid ideas come out of that state. And then spread like a plague to the rest of the nation.
Gee, no offense to any fools from NYC, but we really need a huge tsunami to pound some sense back into you morons and your moronic city… But, really I mean NO offense, I really hope I haven’t offended about by wishing a natural catastrophe on you and all your family and friends, I’m really sorry if I have.
None taken. Every time I go through the South Bronx, or am riding on the subway, I am in complete agreement.
Hey imploder,
don’t worry, if a catastrope occurs that requries people to flee–Manhattan is toast. No way most of us will ever get off this island. I live near the 79th Street Boat Basin, and for somebody with a gun, hijacking a boat is probably the best option. The Bronx and the other boros–escape will be much easier.
spoken like a true New Yorker.
We need more of a hard edge in California.
Hey, the ideas are conceived in MA, and practiced in CA. Been like that for at least a few decades. Get your facts straight, man.
Having been thru 2 major earthquakes, (3/4s of a mile from the epicenter for one) I’m a little sensitive. Let me tell you they are no joke….
“Too many really stupid ideas come out of that state”
Isn’t Broadway in NY?
We may make the stupid ideas, but you glorify them and make money too. You’re really smart!
Yahoo CEO is a old school media guy, not a tech guy and there is only 1 CEO per company so its irrelevant to the home market.
Your chatter is silly. Grey Davis is sooo irrelevant and it’s just a out of date rant. What does that have to do home prices ? If you want to piss away some time - sue a multi-millionare. Yeah he’ll “lose everything.” Go after Jobs - I’m sure he’ll piss in his pants.
You’re not making much sense here. 1985 is a long time ago. Success and wealth created since then is not a bubble. The Valley isn’t a manufacturing center anymore and has done very well as it transitioned to new markets like the current idea generation / implementation.
SV is not designed to be a low wage area and cutting wages isn’t going to attract world class talent to any company. Home prices reflect the high wages and worker skill level. Prices are being supported (not justified) by recenty, strong job growth.
And dude, Google is expanding _locally_ and their continued growth is supporting the home prices. Are you suggesting they’re going to run to low tax states, Wyoming perhaps, to pay less taxes?
Arguing SV is losing out because jobs are being created elsewhere assumes there are a finite number of jobs — nonsense. If HP opens a plant in lower wage ID, it doesn’t mean SV lost jobs but it does help HP keep their high paid guys in SV busy. Yeah ID is great - I lived there - but if HP cut workforce it’s hard to find a good replacement job locally but in SV it’s easier provided you have the skills. Homes owners have a buffer in SV - more places to earn a living. If HP closes in ID, you bet it will hurt home prices.
Same dynamics goes for Apple which is expanding locally and does it’s design and software work locally but builds systems in China. Cupertino has one of the top 5 school districts in CA. The City used to be a joke. Now it’s highly desired and $$.
Are stock options ruining the SV housing market? I read home prices in SV have better fundamentals than S.D. or Sac. and overall CA has better fundamentals than other parts of the country. So no I don’t think stock options are ruining the housing market given it’s been more inflated elsewhere where there are few buyers with stock options.
SV is pricing out teachers, nurses, firemen and police. It’s crowded and work hours are long. There are opportunities and rewards for the hard work but many don’t strike it rich and burn out. Home prices are too high but for this housing bubble, there are far worse home markets than SV.
Yes I grew up here and seen the long term trends. Apple, like many others were much larger in the Bay Area in the 1980’sthen today. For example AMD employed nearly 22K world wide but now only employs.
You also forget many companies from the 1980s did not survive into the 90’s. What the point of a million dollar home when you lost your industry to Korea or Japan in a matter of a year. Every product coming out SV will be built better and cheaper next year. Did you ever see another industry do that. Computer in 1980’s cost over $10,000.. today they are 1000x better and cost under $500.
What the ^&#$# do you call that? Why! we compete on a global market since 1980’s. Globalism has been going on in SV for the past 25 years. There is no such thing as “its different now! New rules apply! Thats nonsense.
If you read up on what the CEO’s comments regarding home prices its pretty clear they are not going to expand locally. They of all people have clearly stated that you need the low and mid range people to support local operations. So called tech class of people cannot exist. I really have a big problem with your comments regarding Cupertino School district. Much of the students you talk about come from Hong Kong. They are smart and bright and drove the test scores higher then the state average. Dont forget the CEO of Apple Steve Jobs was a drop out from the same school district (Homestead High) … the kids back then were Sex Drugs and Rock&Roll. I grew up here and now what im talking about.
Your comments are pretty much propaganda piped from egomanic VC and cheerleaders who more likely came to SV after 1995.
As for lawsuits in Cali. Read up on Brandy! She just got nailed for $50M lawsuie this week.
Hey guys i just received this email 10 minutes ago…
I wonder who still go to seminars like this?
This weekend Nouveau Riche University is holding an Intensive real estate workshop on how to become a real estate investor. This event normally costs $1500 for walk-ins but you can register through me at creatinginvestors@verizon.net . I would need your name, city where you live, email and phone number. If you plan on attending with any guests I would need their info also. Spouses need a separate email also. This event changed my life 6 months ago and has allowed me to invest in properties nationwide. For those who are looking to get into real estate investing, you do not want to miss this event! You can not walk in without being registered first. This event for those who have never invested and want to learn what it takes to those who are seasoned investors looking to take their investing to another level.
75% of all the wealthy became wealthy through real estate investing and business ownership. If you do not have real estate in your portfolio, your retirement will never be enough. Come learn how to get 50-150% returns on your investment and learn to get it tax free through through self-directed IRA’s. A lot of people are worried about the market right now, well we say bring it on! There is always money to be made in real estate, now is the time to get in, not tomorrow. Become educated, do not listen to the nay sayers, CNN, the local paper , or wall street pundits who want you to invest in funds earning 5-12%, they make commissions only on those products, not real estate, so get the information needed to be educated about your retirement and future, no one else cares but you
And 75% of people will become real poor with investing in real estate. Hey 75 plus 75% makes 150%. Or is it 75% MINUS 75% makes a big ZERO.
By the way this is in socal…..and was listed in a university listserv.
“I wonder who still go to seminars like this?”
Those with more time than money.
–
Or, those with more money and time than brains!
I can beat that. I got a PERSONAL invitation last week from Donald Trump to attend a seminar in San Diego (he couldn’t make it, but his daughter would be there). It was about how you can make a gazillion $ in RE the Trump way. He must really like me, because there were two free tickets (each for two persons) included. Maybe I can become his friend and buy a condo in one of his developments, pre-construction?
It’s strange that Trump is venturing into those waters. He has an infomercial as well these days.
One would think that sort of endeavor would be beneath him, especially at this stage in the game.
Not unless Forbes is correct, and Trump is worth far less than he trumpets (pun intended).
Typically, people who run infomercials about schemes to get rich, themselves get rich by selling their info “junk” to unsuspecting marks.
My guess is that Trumps ‘fortune’ these guys consists largely of his “Apprentice” series on NBC - hence the reason for his so-called feud with Rosie O’Donnell, with the need to bolster flagging ratings.
http://www.cnn.com/2007/SHOWBIZ/TV/01/09/television.trump.reut/
wow, he’s daughter……………….uh, what else you got?
I guess I should have scanned the invitation and posted in on the HBB Photo Gallery. Too late, they picked up the recycling bin last Monday. It will be probably be reincarnated as toilet paper.
Not to worry OB_Tom. I still have mine and I’ll send it into the gallery in your honor. It’s still sitting unopened on my desk, where I have been using it as a coaster since it showed up.
“It was about how you can make a gazillion $ in RE the Trump way.”
Did it mention that you need a daddy worth several billion dollars to keep your a$$ out of jail when the $hit hits the fan?
–
“I wonder who still go to seminars like this? ”
Those who want to prove PT Barnum right: “There is a sucker born every minute.”
Jas
It’s always like this…at the end of the day-trading-on-margin-blow-up, I saw more “seminars” for learning how to trade then ever before.
Just like at a kegger, the wannabes show up last.
That guy “hired” Casey Serin. What a joke… “Newly Rich University”
Buying RE is great when you buy at low or even reasonable prices. When you get in after a 200% runup in five years, you will be screwed for a long time.
Screwed for 10 to 15 years.
“A lot of people are worried about the market right now, well we say bring it on!”
I love that quote. I hope it works as well for him as it did for Jorge Bush.
‘You ride the wave until it dies and wait for it to pick back up.’
What if the wave you were riding turns out to be a tsunami?
Then you wait several miles inland.
Maybe that’s how the Navy ship from the post awhile back got to Las Vegas…
LMAO.
‘A lot of builders kept right on building up until December because they didn’t want vacant lots on their books.’
Let’s see if I get the logic here. “As long as I am sitting on a declining value asset, I may as well make it worth more by building a house on it, so I can lose even more money than I was already going to lose.”
Builders may want to reduce land inventory by building and selling for a small profit as fast as possible. Deep down they know if they hold on to the land it will decrease in value fast
Yup, it makes sense. It also brutally undercuts the resale market.
The more you lose the better it is. That way it looks much more credible and you feel better on the ego level. Typical American irrationnal exhuberance. If you lose lose, lose a lot ! Make you lost even bigger. It proves that you are real macho man and a big shot like Donald Trump. Go big, go bust with pissazz. It’s much more fashionable.
Why not gamble when it’s somebody’s else’s money? I’d love to hit Macau playing with the bank’s dime. If I win, I keep the profits. If I lose, the bank gets the empty envelope in the mail.
The bigger the wave, the bigger the crash. This tidal wave will be a house of pain.
Casey Serin spent plenty on those seminars, and those who gave them have far less risk than brokers/underwriters.. mmm, perhaps we should creat a seminar/webinar on how not to be a FB and just charge 100.00, even with minimal attendance….
That’s EXACTLY what Ben should do…screw the server issues…
Just rent a Holiday Inn, and charge $100 per head.
I’ll bring the Chex Mix.
And I’ll bring the keg .
Last time I checked logging on here was free.
Granted you have to wade through some less valuable posts but the education is out there.
Joking, dude.
Can you imagine dealing with those types? I’d shoot myself if I had to go to one.
I love this blog…I’ve learned more than just about the housing implosion. However, it’s not completely free…we do need to occasionally send Ben some $$$ to help with his ever increasing bandwidth/server issues.
This blog is priceless. Seems like we do get the crazed anti Californian screechers (no, not me..), hyperpartisan rantsters, frothing mouthed racist dogs, and the occasional troll, but overall some great discussion and comedy. And much funner than seminars. Sometimes the “professors” have the funniest posts and the “class clowns” have the best market observations.
Please don’t send Ben any more donations…this damn site has become my latest obsession and unless it goes away I think I will continue to spend countless hours at it until David Lereah finally admits that the housing market is in free fall (Eraly 2008).
PS I just sent my first donation a few days ago…i felt like I was paying a crack dealer:-)
I paid a group of midgets to satisfy my wife so I didn’t have to leave the keyboard. We both agreed it was worth every penny.
wow, ummmm can you speak to my hubby?
Surf’s up, dude!!!
Everybody in … woo !!!!
- “Cox said out of 10 housing contractors he used to work for, he is only working for two at the moment.
….soon to be only ‘one’ contractor the next moment.
“Few semi-skilled workers, especially those who have been working on mass-produced tract homes, are equipped to transfer over to commercial work. ‘They’re programmed to do one thing in every house,’said Chris Cox of Cox Plumbing. “
It’s certainly reassuring to know that all those overpriced Mcmansions were built by “semi-skilled” workers.
I’ve done more than a little bit of construction work. “Semi-skilled” is a very nice term for some of what I’ve seen.
There have been ads in the Phx papers/magazines for attorneys “specializing” in just that thing..shoddy construction issues.
Next big thing.
Had a meeting with some VP’s (I think they have 5,000 of them - LOL) of a large national bank and they stated residential is on its a$$. Several contractors are scrambling for work and not selling many houses - however, “there are no signs of stress in the local market and since these builders made so much money they can survive was is expected to be a short slowdown”
I asked what is short - “after this year things will be humming along, as you know our market is very unique” _ BAHHAHAHAHHA.
Thankfully, Bakersfield is very unique.
I would agree. I have heard that B’Field is the armpit, a$$ho#e, crotch, carbuncle or hemorrhoid on butt of, absessed tooth in mouth of,hellhole in middle of.. California from people all over the western U.S. I have never heard that about any other town. Maybe that is what they are talking about.
p.s. My brother lives there, so I would never say those sorts of things.
I can’t resist:
The Bakersfried City Motto:
Bakersfield,
Oil, carrots and pesticide dust.
Send them a Bakersfield City welcome basket:
1 quart of Mobil 30 W motor oil
1 lb bag of baby peeled carrots
10 oz jar of Ortho Malathion pesticide
LOL…hilarious.
“there are no signs of stress in the local market and since these builders made so much money they can survive was is expected to be a short slowdown”
Are those the “builders” I see running around in a tricked out Hummer towing a trailer full of quads with their contractor vanity plate “IBUILD”
Or are those the VP’s?
LOL
Right on Catherine,
Are those sorts of a$$wi#&s everywhere? I know exactly the type, but maybe there is something “special” about them in B’Field. Do they have duallies on the Hummers of something?
I read Bakersfield is getting a Banana Republic, maybe thats it.
LMAO. Yes we are.
manraygun said:”She just observes what she wants to observe. We’ve sent her links to the la times charts that show declines in LA areas across income ranges. She says she’s too busy to look at charts. If she did she’d see many YOY negative numbers including swanky LA areas, some 15-20%.
She’s in denial. Send her those charts again in 6 months.
manraygun said:”She just observes what she wants to observe. We’ve sent her links to the la times charts that show declines in LA areas across income ranges. She says she’s too busy to look at charts. If she did she’d see many YOY negative numbers including swanky LA areas, some 15-20%.
She’s in denial. Send her those charts again in 6 months.
Sorry about the double post.
The more I read this blog the more I am convinced that the torpedos that will sink the good ship SS Housing Bubble are (1) Affordability (2) Inventory. The rest is a lot of noise. JMHO
Agreed with the two you mentioned, but I think there is also an important third torpedo: Credit. The credit crunch has only just started, but it will continue to tighten as more subprime lenders go BK and investors get scared away from the subprime MBS due to the rising defaults. As credit tightens, it takes away the ability of more people with resetting ARMs to refi, which will lead to more foreclosures.
Agreed……….guess I lumped credit in with affordability.
Well, that’s understandable, since it was the ridiculous credit that allowed people to “afford” their homes that lead to this bubble. Funny thing is, I kinda considered credit more associated with inventory because, as posted above, it will lead to foreclosures which will lead to increased inventory. Just different ways of looking at the same thing but still ending up with the same answer, I guess.
(3) Tight money
“Ride the Wave…”
Does that mean buying California real estate is sort of like f#ck!ng a fat woman?
LOL
I don’t get this one at all.
Will somebody who has boinked a fat woman ’splain pls…
Try to keep it clean.
Where is imploder when you need him
ROFLMAO!!!
Your mama is soooo fat…I had to slap her thigh and ride the wave in.
help any?
Bruce Willis in “The Last Boy Scout”, right???
Well if you must know…..
the video explains all:
http://www.youtube.com/watch?v=_39GipPOgZ8
OT - Zillows came up with house in CA SJ which seems poised to go to uncharted territory
http://www.zillow.com/Charts.htm?chartDuration=10years&zpid=19839012
Thats a pretty common chart around many SJ-Santa Clara County cities. In prior decades it would be more flat keeping up with inflation. Prices has zoomed 300-400% in under 10 years, way above the normal trend. LOL! I can assure you this is not Beverly Hills or Maibu Beach. Its cheaper to live in So Cal than in Santa Clara County.
I would expect lots of foreclosures due to resets in Santa Clara this year.
Till this chart points in the right direction the fat lady has not sung.
Welcome to
Santa Clara County
More Toxic loans
in then any other
Metro in the US!
Ben,
I have a question. Why are all the threads/posts related to what is going on in California? Do people there really think they are the centre of the universe like I have heard?
Yes
It’s also more exciting to watch a 1M California home fall $400,000 in value (whenever it ever happens) than a Houston home fall from $149,000 to $125,000. A bigger train wreck, that’s all.
Busta,
We are all responding to the leading article, which was about California. If you read the other articles Ben posts, you can pick other parts of the country to flame. Cheap shot to California, if you’ve never been here.
England, by chance?
Please read the blog for longer than a day.
Generally, Ben starts on the East Coast news, then to the South or Midwest and on to the West Coast. All pretty convienently timed to the time zones and who is up at what time.
Maybe you are logging on late in the day and don’t scroll down.
Try mixing it up a bit and look at the blog earlier in the day.
What? You mean the California Universe?
Funny how history is repeating itself.
BusinessWeek: December 30, 1991
WHEN CALIFORNIA SNEEZES…
http://www.businessweek.com/archives/1991/b324623.arc.htm
wouldn’t even cover Bakersfiled now……..from 1991
Wells Fargo & Co. announced that it will set aside $700 million for loan losses because of persistently weak California real estate.
“In 2003, three out of 10 newcomers to Clovis who responded to Dozier’s survey said they had moved there from the Bay Area. In 2006, only one out of 10 said they came from the Bay Area.”
No they didn’t move there. I know of several here in Salinas that bought in Clovis late last year as quote “investment” and never even went to look at the property they purchased. I’m waiting to hear their tales of woe next year.
I think the reason why Ben posts the California articles last is because the of time difference between east and west coast .Course everybody knew that …right ?
Anyway …I hope when Ben moves the site he keeps the same format ….hint hint . Also Ben should have a way for people that do not like to use paypal to be able to sent checks /money orders .
Also, L.A. County and Orange County went down alot more than its stated because of the cash-backs ,inventives ,and concessions . I bet sellers received 5% to 10% less out of the 2006 net closing proceeds verses the 2005 net seller closing proceeds .
Trump is reserving a chapter in his next book laughing at those suckers who paid for those seminars
I thought trump seminars were down 80% in price
anyone want to comment on why housing related stocks are up ?
http://finance.yahoo.com/q/bc?t=2y&s=URI&l=on&z=m&q=l&c=becn
Bedub,
Oh, I’ve been there alright. I would be embarrassed (if I lived there) by all the hype: ESPECIALLY LA. What a DUMP. Hollywood Blvd. ? Sunset? The beaches? Come off it. Scuzzville.
Whoever hypes that junky city oughtta have his/her/its head examined.
Where are you from?
Montreal. A city with class, culture and sophistication.
Nice town, damn cold though. In the winter, the town lives in those underground malls and connecting tunnels. Too bad les Hab have laid down and died.
Montreal? Is that like Solvang or something?
Yea,
I think I have heard about that place. Don’t they have really good coffee and some restuarant with an accordion out front?
0 Degrees. Sounds like fun. LOL. It was 68 here today.
http://www.weather.com/outlook/travel/businesstraveler/local/CAXX0301?from=search_city
“Montreal. A city with class, culture and sophistication.”
this means they “already have” a Banana Republic…
“Montreal. A city with class, culture and sophistication.”
Does Trump have a tower there?
Hon-hee-hon-hee-hon…
I don’t know , I guess the older I get I’m just happy I have a roof over my head sometimes ,(especially when it’s cold outside ).
leaving la was the best thing i ever did for my sanity,i live in the central coast of calif…..but la has its charm,great food culture and diversity, all big cities have problems……those taht dont know the city love to bash it…i agree iwht investor girl,those charts are meaningless,prices in los angeles have not dropped yet,in fact they seem to be getting higher
What area of LA? Where I’ve been looking asking prices are down 20% YOY and sales prices are down 7%.
And inventory keeps growing…
Got popcorn?
Neil
I have family on the central coast - My wife was born in SLO. I love it there!
LA has some good qualities I have family there in and Orange County and both towns have great things about them. I think the generalizations by bustaboom are just that.
The credit crunch will hit california hard,and sometime this year.we are almost 100% jumbo loans…and with the lovely news about subprime lenders failing and the wave of foreclosures, that money is likely to go somewhere else,suddenly.nice to see Yreka mentioned,my dad had a ranch in long gulch in the late 40’s and 50’s.beautiful,brutal country.
“The Mother of all Bubbles”
http://www.atlanticfreepress.com/content/view/848/81/
Compton is a sellers market. I just bought a 2 by 1′r for $879,000. I had to pay more than asking because the realtor said their were other bidders. I am going to make a fortune flipping the place as it is beach adjacent(according to the realtor since I never actually saw the place). BTW anybody know how to get the bars off the windows. Its a nice neighborhood now so they are not needed.
the san fernando valley still red hot…..especially the eastern portion,west los angeles,the fairfax area,hollywood……these are areas with jaw dropping appreciation in the last five years…….inventory is not increasing in these areas and prices are not dropping either…i want the bubble to burst as much as the next guy in these parts of la……but these are the facts it has not happen yet there.the house i sold in studio city calif IN SPRING OF 05, was sold for 75k more than i sold it for in the summer of 06,and i made 500k off that starter home.la is different…….
Objectivity much appreciated
That was then, this is now…
We sold our house in 90275 RPV in Aug ‘05 and it’s worth around 20% less currently~ And for a “smoking” market, we only had one offer in 2 months, in a wealthy area, no less.
More importantly, ho hum houses are getting little or no attention, nowadays. In Hacienda Heights, where my mom lives, she told me a tale of a couple of friends of hers that put their houses up for sale 6 and 8 months ago and there has been virtually no interest and as they’d bought the houses eons ago for around $100k, they’ve got plenty of room to negotiate.
The only way to have “won” in a market as overpriced as el lay is, was to move somewhere else. No lateral moves were possible~
Ben,
Everyone’s on their “A Fourth Day” while I’m on my “A Second Day”,
they are all just mess’in with my mind.
Good night all!…